China Court Rules Microsoft Infringed Firm's IPR

A Chinese court has found Microsoft Corp. (MSFT) infringed the intellectual property rights of local company Zhongyi Electronic Ltd., according to a copy of the court's decision seen by Dow Jones Newswires.

The decision comes during U.S. President Barack Obama's first official visit to China and at a particularly sensitive time in the trade relationship between the two countries, which are involved in disputes over Chinese tires and steel pipes and U.S. autos.

Beijing's No.1 Intermediate People's Court found Microsoft had exceeded the scope of a previous agreement to use and sell fonts owned by Zhongyi, according to the document.

It found Microsoft had installed and used the fonts in eight of its operating systems beyond what had been agreed with Zhongyi, and ordered Microsoft and its China-based unit to immediately stop producing and selling those operating systems.

However, the court didn't support Zhongyi's claim that Microsoft's use of Zhengma software, which allows computer users to enter Chinese characters using Western keyboards, also infringed its intellectual property rights.

Zhongyi General Manager Lan Dekang said his company is reviewing the decision and has yet to decide whether to appeal the decision.

Microsoft has repeatedly denied the charges. It wasn't immediately available for comment on the outcome of the trial.

Zhongyi filed the case against Microsoft in April 2007, alleging the U.S. company used its fonts and the Zhengma program without its permission in operating systems starting with Windows 98. Zhongyi said the scope of its agreement with Microsoft limited the U.S. software maker to using its intellectual property in Windows 95 only.